FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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1. You decide to short sell 100 shares of ABC Corporation when it is selling at its yearly high of P42.25. Your broker tells you that your margin requirement is 60% and that the commission on the sale is P20. While you are short, ABC Corporation pays a P.85 per share dividend. At the end of one year you buy your ABC Corporation shares (cover your short sale) at P44 and are charged a commission of P20 and a 5% interest rate.
a. What is your peso return on the investment? (Show the solution and computation).
a. P384.50
b. P432.88
c. -P432.88
d. -P384.50
b. What is your
a. 10.48%
b. 12.87%
c. -15.05%
d. -13.98%
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